Thank you to everyone who left a comment this week on how to organize and layout the wall pockets. The advice was really helpful in a lot of ways. It looks like this layout wins (with changes):
Jackamo mentioned that having larger wall pockets will increase the possibility that heavy items will weigh down the fabric and/or the rod so the huge wall pocket was out. However, people mentioned that the other option looked more balanced, so I'm nixing the banner and will add some artwork of mine and my children's in that spot. Watoosa had the great idea of coming up with a painting and then having my kids to a "study of" and putting those drawings next to mine. What a great idea! The outcome should make any abstract expressionist proud.
I also really like the idea of cubby organizers mentioned by Cheryl and Elle. There are small items that may get lost in the bottoms of the pockets or heavy items that will rip the fabric with daily wear and tear. So to find some sort of organizing cubby system that won't take up too much space for moving in between the beds and the wall is on the list of to-do.
Thanks to everyone!